The Treasury announcement on Monday adds less than 10% to the £917m already committed to anti-avoidance during the current spending review, but immediately followed the latest tirade from PAC chair Margaret Hodge in her continuing moral crusade against tax avoidance.
The hook for her latest intervention was the committee’s report on HMRC’s annual accounts for 2011-12, which included stinging criticisms for multinationals that exploited tax rules to minimise their UK corporation tax bills and HMRC for allowing them to do so unchallenged.
After listening to “unconvincing” and in some cases “evasive” evidence from Amazon, Google and Starbucks at a recent hearing, Hodge commented:“The inescapable conclusion is that multinationals are using structures and exploiting current tax legislation to move offshore profits that are clearly generated from economic activity in the UK.”
In her view, both HMRC and corporate taxpayers were failing to meet legitimate public expectations from the tax system.
“HMRC should be challenging this but its response so far to these big businesses and their aggressive tax planning has lacked determination and looks way too lenient. Policing the tax system must be at the heart of what HMRC does,” Hodge said.
The thought that huge global organisations generating significant profits in the UK were getting away with paying little or no corporation tax was “outrageous” and “an insult to British businesses and individuals who pay their fair share" she added.